Financial Accounting Course

U.S. GAAP Codification IFRS International Standards Accounting Topics

Expense Accounts 01
Examples and Practice Questions
U.S. GAAP Codification, Accounting Textbooks
Financial Accounting, Intermediate Accounting, Advanced Accounting
U.S. GAAP by Topic, Accounting by Topic
Expense Accounts 01
Examples and Practice Questions
Expense
1. Expense is the use of resources to generate revenue
2. Expense is recognized when related revenue is recognized
--> this is called "matching principle"
* Debits and credits
1. Expense accounts have normal balances on the debit side
2. Increases in expense accounts are recorded on the debit side
3. Decrease in expense accounts are recorded on the credit side

Examples of expense accounts
Cost of goods sold

Selling, general and administrative expenses
Salaries expense
Advertising expense
Rent expense
Travel expense
Communication expense

Insurance expense
Supplies expense
Utilities expense
Depreciation expense

Other expenses and losses
Interest expense
Income tax expense

Practice Questions
1. On November 1, 2010
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Entity A purchased 500 units of merchandise at the price of $10 per unit
and paid full amount in cash
2. On November 12, 2010
Entity A sold 200 units of merchandise at the selling price of $14 per unit
and received full amount in cash
3. Prepare journal entries at the following dates
(1) November 1, 2010
(2) November 12, 2010
4. Journal entry at November 1, 2010
debit credit
Merchandise 5,000
Cash 5,000
5. Journal entry at November 12, 2010, to record revenue
debit credit
Cash 2,800
Sales revenue 2,800
6. Journal entry at November 12, 2010, to record expense
debit credit
Cost of goods sold 2,000
Merchandise 2,000
7. Sales revenue = $2,800
Cost of goods sold = $2,000
Gross profit = Sales - Cost of goods sold = $2,800 - $2,000 = $800
8. At December 31, 2010
Balance of merchandise = 300 units x $10 = $3,000

50 Questions on
Accounting Journal Entries
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Codification Topics at the 100 Level

Topic 105: Generally Accepted Accounting Principles
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Codification Topics at the 200 Level

Topic 205: Presentation of Financial Statements

Topic 210: Balance Sheet
Topic 215: Statement of Shareholder Equity

Topic 220: Comprehensive Income
Topic 225: Income Statement

Topic 230: Statement of Cash Flows
Topic 235: Notes to Financial Statements

Topic 250: Accounting Changes and Error Corrections
Topic 255: Changing Prices

Topic 260: Earnings per Share

Topic 270: Interim Reporting
Topic 272: Limited Liability Entities
Topic 274: Personal Financial Statements
Topic 275: Risks and Uncertainties

Topic 280: Segment Reporting

Codification Topics at the 300 Level

Topic 305: Cash and Cash Equivalents

Topic 310: Receivables

Topic 320: Investments-Debt and Equity Securities
Topic 320-10-35: Transfers of Securities: Between Categories

Topic 323: Investments-Equity Method and Joint Ventures
Topic 325: Investments-Other

Topic 330: Inventory

Topic 340: Other Assets and Deferred Costs
Topic 350: Intangibles-Goodwill and Other

Topic 360: Property, Plant, and Equipment
Codification Topics at the 400 Level

Topic 405: Liabilities

Topic 410: Asset Retirement and Environmental Obligations
Topic 420: Exit or Disposal Cost Obligations
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Topic 430: Deferred Revenue

Topic 440: Commitments
Topic 450: Contingencies
Topic 460: Guarantees

Topic 470: Debt

Topic 480: Distinguishing Liabilities from Equity
U.S. GAAP Codification of Accounting Standards

Accounting Standards Codification, ASC, Overview
ASC Codification 100: General Principles
ASC Codification 200: Presentation
ASC Codification 300: Assets
ASC Codification 400: Liabilities
ASC Codification 500: Equity
ASC Codification 600: Revenue
ASC Codification 700: Expenses
ASC Codification 800: Broad Transactions
ASC Codification 900: Industry
U.S. GAAP by Codification Topic

105 GAAP Hierarchy
105 GAAP History
205 Presentation of Financial Statements
205-20 Discontinued Operations
210 Balance Sheet
210-20 Offsetting
220 Comprehensive Income
225 Income Statement
225-20 Extraordinary and Unusual Items
230 Statement of Cash Flows
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250 Accounting Changes and Error Corrections
260 Earnings per Share
270 Interim Reporting

310 Impairment of a Loan
320 Investment Securities
320 Other-Than-Temporary Impairments, FSP FAS 115-2
320-10-05 Overview of Investments in Other Entities
320-10-35 Reclassification of Investments in Securities
323-10 Equity Method Investments
323-30 Investments in Partnerships and Joint Ventures
325-20 Cost Method Investments
330 Inventory
340-20 Capitalized Advertising Costs
350-20 Goodwill
350-30 Intangibles Other than Goodwill
350-40 Internal-Use Software
350-50 Website Development Costs
360 Property, Plant and Equipment
360-20 Real Estate Sales

410 Asset Retirement and Environmental Obligations
420 Exit or Disposal Cost Obligations
450 Contingencies
450-20 Loss Contingencies
450-30 Gain Contingencies
480 Redeemable Financial Instruments
505-20 Stock Dividends, Stock Splits
505-30 Treasury Stock
605 SEC Staff Accounting Bulletin, Topic 13
605-25 Revenue Recognition - Multiple Element Arrangements

715-30 Defined Benefit Plans - Pension
718 Share-Based Payment
730 Research and Development
730-20 Research and Development Arrangements
805 Business Combinations
810 Consolidation
810 Noncontrolling Interests
810 Consolidation of Variable Interest Entities, SFAS 167

815 Derivatives and Hedging Overview
820 Fair Value Measurements
820 Fair value when the markets are not active, FSP FAS 157-4
825 Fair Value Option
830 Foreign Currency Matters
830-20 Foreign Currency Transactions
830-30 Translation of Financial Statements
835 Interest
835-20 Capitalization of Interest
835-30 Imputation of Interest
840 Leases
840-20 Operating Leases
840-30 Capital Leases
840-40 Sale-Leaseback Transactions
845 Nonmonetary Transactions
855 Subsequent Events
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860-20 Sale of Financial Assets, SFAS 166
860-50 Servicing Assets and Liabilities, SFAS 156
985-20 Costs of software to be sold
U.S. GAAP by Topic
Accounting Topics
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